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CB Richard Ellis Stock Offering Brings in a Total of $454.9 Million

The $19 share price is below the expected range. The real estate firm will use some of the proceeds to reduce debt.

June 10, 2004|Roger Vincent | Times Staff Writer

Los Angeles real estate services giant CB Richard Ellis Group Inc. went public Wednesday, raising $135.7 million in a stock offering.

It sold 7.14 million shares at $19 each, short of the $20 to $22 sought by managers, according to a filing with the Securities and Exchange Commission.

The bulk of the offering's proceeds went to two big CB Richard Ellis stakeholders, Blum Strategic Partners and FS Equity Partners, which sold a total of 16.8 million shares, grossing $319.2 million.

"Despite being priced below offering range, this does demonstrate the general improved strength of the IPO market and the slow but improving fundamentals of commercial real estate," said Wayne M. Brandt, managing director of real estate finance for RBS Greenwich Capital in Los Angeles.

CB Richard Ellis will use some of the money to pay off debt -- including the remaining $38.3 million of its 16% senior notes due 2011 -- and for general corporate purposes.

CB Richard Ellis Group, formerly CBRE Holdings, said it was the world's largest commercial real estate services firm in terms of revenue. The company has 13,500 employees in 220 offices in the U.S. and abroad and offers brokerage, appraisal and property management services.

The company reported a loss of $16.6 million on revenue of $440.9 million in the quarter ended March 31, compared with a loss of $1.3 million on revenue of $263.7 million a year earlier.

CB Commercial, as the company was known, went public in 1996 and merged with Richard Ellis in 1998. CB Richard Ellis went private during the real estate recession of the early 2000s and acquired competitor Insignia Financial Group last year.

Blum now holds a 42.3% stake in CB Richard Ellis. FS Equity Partners owns 10.2%, and the California Public Employees' Retirement System owns 3.6%. Chief Executive Ray Wirta owns 2.9%.

CB Richard Ellis shares will begin trading on the New York Stock Exchange today under the symbol "CBG."

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Bloomberg News was used in compiling this report.

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